Chinese rare earth steel and F-35 supply chain risks.

China's expansion of rare earth steel production and consumption for large-scale infrastructure projects, along with its export controls on seven groups of rare earth-related products, is increasing supply chain risks for several US defense programs, including the F-35 fighter jet.

This context is noteworthy because China currently accounts for approximately 70% of global rare earth mining and 90% of the world's rare earth processing. On the US side, programs such as the F-35, nuclear submarines, missiles, and drones are reportedly facing concerns about shortages of rare earth-related materials.

Overview: Rare earth steel is being brought to domestic projects.

At an industrial complex in Baotou City, Inner Mongolia Autonomous Region (China), rare earth elements are added to the steelmaking process to create high-performance alloys. According to the Science and Technology Daily (China's official newspaper), this advanced rare earth steel is being used in projects ranging from high-speed rail and wind turbines to the large hydroelectric dam under construction in Tibet.

Along with rising domestic demand, export control measures announced by China in April on seven groups of rare earth-related products have significantly narrowed the supply to foreign customers, according to the source.

A point of contact with US defense: rare earth materials in subsystems.

Of the seven product groups subject to export controls in April, at least four—gadolinium, terbium, yttrium, and dysprosium—were described as being widely used in advanced US military aircraft subsystems and components.

From a technical perspective, tightening the supply of these materials could put pressure on components other than the bodywork or engine, but rather on sub-assemblies, auxiliary systems, and the supply chain for production, maintenance, and upgrades. The article does not specify usage norms for each platform or component, therefore it is impossible to quantify the impact on each program.

Regarding the F-35, the Pentagon stated in September that the upgrade package, known as Block 4, would not be completed until 2031, five years later than originally planned.

Technical analysis: why "rare earth elements in steel" are important.

Research into integrating rare earth elements into steel began during World War II. According to the source, adding rare earth elements helps refine molten steel, smooth the grain structure, and improve the microstructure; thereby increasing corrosion resistance, impact resistance at low temperatures, and improving weldability.

These properties are well-suited to the needs of structures subjected to heavy loads, harsh environments, and requiring a long service life. An example cited in the source is the Yarlung Tsangpo hydroelectric project in the highlands, where temperatures can drop as low as -30°C—conditions described as too harsh for conventional steel.

Industrial capacity: research ecosystem and production scale

The Bayan Obo mining area in Inner Mongolia is said to contain approximately 36% of the world's light rare earth reserves. This area is located about 120km north of the industrial city of Baotou. In Baotou, the state-owned enterprise Baotou Steel Union Co. has been researching and developing rare earth steel for over half a century.

Wu Pengfei, the technical leader of Baotou Steel Union Co., told the Science and Technology Daily that the company has “successfully combined rare earth and steel production.” He said the company now produces 33 types of rare earth steel, adding 3,000 yuan (approximately $425) in value per ton and generating more than 3.6 billion yuan (approximately $510.2 million) annually.

Baotou Steel Union Co. is also described as having collaborated with numerous research institutes and universities, including the Chinese Academy of Sciences, Beijing University of Science and Technology, Northeast University, Inner Mongolia University of Science and Technology, Shanghai Jiao Tong University, and the Central Iron and Steel Research Institute.

In October, the company announced that its annual production of high-grade rare earth steel reached 1.5 million tons. Applications cited include railway tracks for the Budapest-Belgrade line, the China-Laos railway, the Baotou-Yinchuan high-speed railway; solar power projects in Alxa League and Ulan Buh; and energy pipelines such as the East China-Russia gas pipeline and the West-East gas pipeline.

Tactical implications at the force level: risk in “supplies” rather than “equipment”.

For forces operating high-tech military equipment, the major risks often lie not only in the combat platform itself (aircraft, ships, missiles) but also in the ability to maintain its lifecycle: spare parts, replacement components, maintenance supplies, and batch upgrade packages.

The article only raises concerns about the US defense supply chain and lists related programs, while also mentioning a delay in the F-35's Block 4 development to 2031. From these facts, it can be cautiously concluded that the shrinking supply of rare earth elements will increase pressure on supply chain management and modernization progress, rather than directly reflecting the immediate combat capabilities of the F-35.

Main data table from source

Conclude

Data from the source indicates that China is expanding the application of rare earth steels in large-scale infrastructure and energy projects, while export controls related to rare earths tend to narrow the supply for foreign customers. For U.S. defense, a key factor to watch is the extent of “material lags” for upgrade packages and logistical support—with the F-35 Block 4's 2031 deadline being a notable indicator of the challenge to meeting that deadline.